a Front-Row Seat for Detroit's Dysfunction

[lostinblue 1,989]

Bill Nojay: Lessons From a Front-Row Seat for Detroit's Dysfunction Running the city's transportation department was like being in the boiler room of the Titanic.

• By
• BILL NOJAY

Since Detroit declared bankruptcy on July 18, the city's crippling problems with corruption, unfunded benefits and pension liabilities have gotten the bulk of airtime. But equally at fault for its fiscal demise are the city's management structure and union and civil-service rules that hamstring efforts to make municipal services more efficient. I would know: I had a front-row seat for this dysfunction.

Last year, I served as chief operating officer of the Detroit Department of Transportation. I was hired as a contractor for the position, and in my eight months on the job I got a vivid sense of the city's dysfunction. Almost every day, a problem would arise, a solution would be found—but implementing the fix would prove impossible.

We began staff meetings each morning by learning which vendors had cut us off for lack of payment, including suppliers of essential items like motor oil or brake pads. Bus engines that the transportation department had sent out to be overhauled were sidelined for months when vendors refused to ship them back because the city hadn't paid for the repair. There were days when 20% of our scheduled runs did not go out because of a lack of road-ready buses.

The obvious solution for a cash-tight operation is to triage vendor payments to ensure that absolutely essential items are always there. But in Detroit, no one inside the transportation department could direct payments to the most important vendors. A bureaucrat working miles away in City Hall, not responsible to the transportation department (and, frankly, not responsible to anyone we could identify), decided who got paid and who didn't. That meant vendors supplying noncritical items were often paid even as public buses were sidelined.

A major expense for Detroit is the cost of lawsuits filed against the city for various alleged injuries on municipal property. At the transportation department, there were hundreds of claims arising from bus accidents alone. How many of those claims were fraudulent? How many were settled (with the cost of settlement and legal fees posted against DDOT's budget) at unnecessarily high cost?

It was impossible to know, since the city's law department handled all litigation and settled cases without consulting the DDOT staff. It was the law department's policy to settle virtually all claims—which meant that the transportation department became easy prey for personal-injury lawyers bringing cases with little or no merit, costing the city millions.

In the DDOT we tried to hire our own lawyers to fight these claims. But we were blocked by city charter provisions prohibiting any city department from hiring outside counsel without the approval of the Detroit City Council. When we inquired with the mayor's office we were told that the union representing the law department—in Detroit, even the lawyers are unionized—would block any such approval.

Disability and workers' comp claims were routinely paid with no investigation into their validity. More than 80% of the transportation department's 1,400 employees were certified for family medical-leave absences—meaning they could call in for a day off without prior notice, often leaving buses without drivers or mechanics. Management's only recourse to get the work done was to pay the remaining employees overtime, at time-and-a-half rates. DDOT's overtime costs were running over $20 million a year.

Then there was the obstructionism of the City Council. While I was at the DDOT, roughly 10% of bus-fare collection boxes were broken. In another city, getting a contract to buy spare parts to repair these boxes would be routine. The City Council publicly expressed outrage that we didn't fix the fare boxes, since the city was losing an estimated $5 million a year in uncollected fares.

But the reason we couldn't fix the fare boxes was that the contract for the necessary spare parts had been sitting, untouched, in the City Council's offices for nine months. Due to past corruption, virtually every contract had to be approved by the council, resulting in months-long delays. Micromanagement by the council was endemic; I once sat for five hours waiting to discuss a minor transportation matter while City Council members debated whether to authorize the demolition of individual vacant and vandalized houses, one by one. There are over 40,000 vacant houses in Detroit.

Union and civil-service rules made it virtually impossible to fire anyone. A six-step disciplinary process provided job protection to anyone with a pulse, regardless of poor performance or bad behavior. Even the time-honored management technique of moving someone up or sideways where he would do less harm didn't work in Detroit: Job descriptions and qualification requirements were so strict it was impossible for management to rearrange the organization chart. I was a manager with virtually no authority over personnel.

When the federal government got involved, it only made things worse. A federal lawsuit charging that the DDOT did not fully comply with the law in accommodating disabled riders had dragged on for years because of idealistic but painfully naïve Justice Department attorneys seeking regulatory perfection. I felt like a guy in the boiler room of the Titanic, desperately bailing to keep the ship afloat for a few more hours while the DOJ attorneys complained from their first-class cabin that their champagne wasn't properly chilled.

Detroit's other municipal departments had similar challenges. I would often compare notes with managers trying to run the city's street lights, recreation programs, police departments and smaller offices. All of us faced similar gridlock.

The last thing Detroit needs is a bailout. What it needs is to sweep away a city charter that protects only bureaucrats, civil-service rules that straightjacket municipal departments, and obsolete union contracts. A bailout would just keep the dysfunction in place. Time to start over.

Mr. Nojay, a Republican, is a member of the New York State Assembly, representing the 133rd District in upstate New York.

A version of this article appeared July 30, 2013, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: Lessons From a Front-Row Seat for Detroit's Dysfunction.

http://online.wsj.com/article/SB10001424127887323829104578623422748612116.html

[Gary and Alla 3,694]

It is noteworthy that none of this is new. In fact most of these systems of inefficiency which benefit someone who keeps it inefficient, were developed years ago when the city had the highest per capita income in the world. Everyone was so busy working and generating money that no one paid attention to the WASTE which was huge but was covered by the productivity of the city with plenty to spare. It was the 4th largest city in the country.

When times get bad, when the factories close because the manufacturers they dependend on were just as archaic as the city and could not change any more than the city could, then these things come to light. They did not need a ferrier (horse shoer) in 1960 any more than they need one now but who cared back then? There was enough money, let the horse shoe guy have some.

There was a need for fundamental change long ago and they missed the chance. What I fear is that Detroit is not the only city this will happen to, it is just the first

[Karee 4,191]

When we inquired with the mayor's office we were told that the union representing the law department—in Detroit, even the lawyers are unionized—would block any such approval.

Even the lawyers have a union? Now that's funny. Talk about organized labor gone wild.

[Gary and Alla 3,694]

Even the lawyers have a union? Now that's funny. Talk about organized labor gone wild.

I had to laugh at that also. Seems like it violates some law of physics regarding perpetual motion. At the very least it must approach "critical mass"

I have to stop thinking about this, my head hurts!

[Danno 1,228]

I think when we stand in the light of history we will see that Detroit was the first conclusive proof that "Freedom can fail" under our system.... not just falter and survive by propping up.

The core principle that "people" are able to govern themselves and their institutions is not a univeral truism.

In fact if we were honest..... if we were to roll the clock back and require all areas of the country to maintain themselves with the Fed only providing National defense, we would see total collapse in many areas, if there state could not support the food stamps, section 8, Head start, tax refunds to people who never paid tax to begin with.

IF our bloated military was cut, if states had to assume full responsibility for SSI and medicare-medi-cade Schools.

If "all men are created equal" why should not each community and state be just as able to support the functions of Gov't and the care for the truly needy?

Clearly Detroit is not the last metropolis to go under due to inability of it's people to vote in and support qualified leaders which is the first civic duty of those cut out for democracy.

NExt up is the failure of whole states, IL. could be the first in line.

We have seen Freedom fail abroad and now at home, the only question is how far does the political contagion spread, does it bring it all down or can it be contained.

[decocker 7,198]

We have seen Freedom fail abroad and now at home, the only question is how far does the political contagion spread, does it bring it all down or can it be contained.

Freedom as a political contagion...interesting.

[Danno 1,228]

Freedom as a political contagion...interesting.

When it leaves people without police and fire services and the very bread it eats is essentially from the hand of charity.... I think we can conclude a localized failure.

[decocker 7,198]

.... I think we can conclude a localized failure.

you're answering the wrong question.

[Jacque67 7,328]

When it leaves people without police and fire services and the very bread it eats is essentially from the hand of charity.... I think we can conclude a localized failure.

Who needs the police and the fire services. Issue everyone with a gun and a bucket. Crime will vanish and fires will miraculously cease.

[Karee 4,191]

Who needs the police and the fire services. Issue everyone with a gun and a bucket. Crime will vanish and fires will miraculously cease.

A gun and a bucket. That has me in tears. That's gotta be the funniest $hit I've heard in awhile.

[Danno 1,228]

Who needs the police and the fire services. Issue everyone with a gun and a bucket. Crime will vanish and fires will miraculously cease.

Guns can help but someone must register and investigate the circumstances of the death.

I might add, had Detroit flirted just a bit with some limits on Gov't they would have money for police and fire.

But that goes back to the ability of the represented to make good choices based on social capital rather than race and self indulgence.

[RGinWA 816]

It's always the unions fault...

What's next rescind the minimum wage, make child labor legal again and forego those pesky days off? Now that's a free market economy!

Does anyone ever root for the middle class anymore? Do you want everyone dirt poor all while the management and owners get filthy rich?

Detroit's problems started long ago and it wasn't because of one single factor like middle class workers and their unions...it was many factors inside and outside of Michigan that led to this current situation.

You all want your stuff cheap...well this is that hidden cost that they didn't tell you about.

[Jacque67 7,328]

Guns can help but someone must register and investigate the circumstances of the death.

I might add, had Detroit flirted just a bit with some limits on Gov't they would have money for police and fire.

But that goes back to the ability of the represented to make good choices based on social capital rather than race and self indulgence.

Whet is the point in registering guns and investigating the circumstances of death. That is for libtards isn't it? As long as there is less scum on the streets and everyone can have a gun and bucket who cares?

[Karee 4,191]

It's always the unions fault...

What's next rescind the minimum wage, make child labor legal again and forego those pesky days off? Now that's a free market economy!

Does anyone ever root for the middle class anymore? Do you want everyone dirt poor all while the management and owners get filthy rich?

Detroit's problems started long ago and it wasn't because of one single factor like middle class workers and their unions...it was many factors inside and outside of Michigan that led to this current situation.

You all want your stuff cheap...well this is that hidden cost that they didn't tell you about.

You're right, it's not just the unions fault, although they did play a role, Some if it was due to an ultra corrupt mayor that was in power for decades, who whenever would get his hand caught in the cookie jar would scream "racism!" Some of it was due to forced bussing. Having to negotiate union contracts with so many different unions was insane as well. They actually found one union in Detroit, that only had 1 member! That means that persons contract had to be negotiated the same as they do with all the other unions.

[Danno 1,228]

Whet is the point in registering guns and investigating the circumstances of death. That is for libtards isn't it? As long as there is less scum on the streets and everyone can have a gun and bucket who cares?

When you don't have a defendable point of view the only thing left to do is misrepresent the opposing pov.